BRC - Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Brady Corporation Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Officer. Ann would to conference I speaker your Thornton, Instructions] like the to over [Operator Chief Accounting go ahead. Please

Ann Thornton

fiscal morning's call Thank the located on conference and morning, at are The XXXX www.bradycorp.com/investors. website Corporation call. this you. earnings third for welcome slides our quarter Good Brady to

this XX-K, may, September. prepared anticipate Also, factors with Words Slide be call, begin number could Risk forward-looking is just make may rebroadcast We without impact and in various were results. such which we the and to examples consent Brady Brady's identifying SEC note Brady. expect, about that note not expected Please significantly copyrighted of which and fiscal risk and note is XXXX our information a and It's by comments will was morning information. believe, Corporation three. in a of few news remarks forward-looking filed subject on Form noted that teleconference this forward-looking uncertainties are release important as please will, this forecast factors in that words the during our to statement. may

broadcasting recording will call We on and this Internet. the be it

Russell? the in such, your Shaller. constitute the to your consent recorded. session As participation I'll over Brady's Q&A Executive new Russell Chief Officer, will to being call turn now President and

Russell Shaller

on of we Brady released too ’XX my few quarter the Ann. thank is with getting joining to I'd the start great fiscal and you This X. morning, role our taking organization Thank since results, incredible with morning, a Good quarter for which into brands. CEO you, financial all third views April deep before results, a like us.

who place every trust have single day. loyal Brady We in customers their

identification of competitive products, We offering expansive have safety and moats defensible relevant product which positions. most create deep and and of have an

that inclusive are we To our of our net our communities providing is always cash have stakeholders, our what's solutions serve employees on ensuring including outstanding excellent of we committed highly who all position, we to people employees, an shareholders. of doing a course, have right that a customer in service, group of and and together. We innovative an ownership our to end, history seek are are we focused generation. take culture out are Financially, cash Brady incredibly and where strong encouraged and, robust

Lastly, in way of we transforming excess into on will are our company consistently grow a Brady that in well GDP.

So a is sales grown and Brady year, far solid XX%. nearly foundation financially organic by strong. we've this history, a has rich

we where can better. do areas are there However,

puts and have First, fantastic the innovation, businesses. culture and the while competitiveness where do of we that encourage we that a center of better be value at addressing could the all of some we customer our at we

results. solid slow of have financial business, the quarter, historically, too much in were adjusting For these a core, At you we the Workplace our we took our improved instance, the team in our to see that and in Safety can improve beginning business third actions WPS profitability, of model. positive actions in results but the

need portfolio us are growth. long-term for changes of acquisitions well pieces our our we There management. strengthen make portfolio position is and where Second to certain foundation additional to our including

Third is footprint. geographic our

are where customers, strive Fourth, in providing Southeast several ripe We other be we to our to and certain for We invest have are more an to in where as faster-growing end closer areas aggressive are clear there our be solutions expansion. markets opportunity economies underpenetrated. markets Asia our and need there shifting see we tailwinds. macro portfolio and into to we customer that in to

has focus forward on environmental must journey. ESG Brady's XXXX as the we move capital. saw manner and reducing our the and been into believe as ESG of stock the positive an report quarter, generate the Last a products internally product download is encourage launched just trading their executed footprint, buyback us our our clear a acquisitions. area what intrinsic their strongest reducing of this environmental report. before with on uses on right footprint focus it will investments, portfolio website the our want of we've I and we must we our the definitely track things where published area industrial macro to versus value the also as and that behind we take we week, would several This price. we capabilities instance, the like own be Brady's one efficiency. of last right our gives shareholders. at can't ESG. and of look the We in need doing an give we aimed in to focus we below buying can and accelerated disconnect program intrinsic has of the Earlier to company. is ESG generate To that's because ours, trends overall and item drive must to Brady that For efficiency trace journey is aggressive and a our through very cash, to great touch moving to financials, woven new I'd ESG ESG customers lastly, our fabric win. into and back more of trading from a definitely in and our the be thing which both doing a value products you at customers being shareholder are significant our ability value designing that aid smart us mine on And positive return our from our to many do passion be and well. is be some part environmental while is increasing improving we're

to position, Director filled new ESG. pleased we've of that created I'm Finally, and announce a

across we need For someone who the clear scope accountability it's complexity a and a picture company big with the program, truly successful can organization. have our see and drive to ESG

to results. work I'm the how deliver healthy our per our a QX our morning, and showed able team customers Now earnings shareholders. all-time X.X%. has which financial This been sales of quarterly and excellent both and released growth proud we per by to record GAAP high results, for this share We challenging by and we our earnings macro XX.X% grew increased environment sales through share.

quarter, we executed to overall streamline business. and which were our This certain in WPS quarter, improve helping of changes our incurred the of WPS to costs improve business. in the severance, competitiveness overall these Included profitability early third the

expense, done. and share we you what We're If we're exclude impact even significantly solid amortization exclude from periods presented, then at XX.X%. of up the accomplished WPS have a at related more earnings Brady, far charges per we've proud all these but from was of our foundation, and

ahead, priorities GDP. continue foremost, As a our to we grows evolution are, and into our company that first look excess of in consistently

in continue recent and our to order industrial capabilities the integrating our segment. Second in trace improve acquisitions to is track

organic available capital impacts Third effectively long-term and value, And to possible to would providing drive inflationary returning gross is investments, shareholders. customer include and the necessary acquisitions all pre-pandemic order margin our to our in ensuring return mitigate the pricing while that levels, take of and demands. meet to best the service this shareholder and funds to finally, deploy to which to have are products actions customer environment the efficiency we

Workplace confident our for don't our in Although know be, to I'll will what Solutions of specific customers, provide and about for shareholders. our Aaron? deliver and, to our the our return of challenge next Safety financial as businesses I we priorities businesses. I'm see to to each details these provide now some call more ability results employees our commentary the on turn results. Identification over what I'll the and Then course, Aaron strategic

Aaron Pearce

One, a for start are good Slide five that of profit our a our increased EPS XX% to each full this to very EPS number non-GAAP up in quarter. WPS Four, very a Sequentially, we Three, by profit we to by strong morning, nearly to this Two, and Fifth, segment market this turn once we and even over quarter. we pullback segment improved from quarter XX.X% also had sales of take And with again grew up fiscal financial structure. this we'd took three Non-GAAP quarter. its million year. quarter. away exclude streamline to we IDS subsequent being Russell, gross repurchased challenging percent our non-routine X.X incurred well. repurchased had year million like to XX.X% was we you, charges of key a guidance. margin the macro the XX.X%. this -- XX.X%. margin. the total total There recent in finally, financial year. profit Please Thank profit XXXX sales last very improved Overall, this more was as growth EPS our shares, our XX% $X after record cost you and QX increased segment our from repurchases divisions of And this advantage shares increased XX.X% sales QX performed full end, and share strong you of environment, highlights to we everyone. review. quarter.

Slide for number to quarterly X move Let's our trends. sales

growth an of X% sales and Solutions robust grew from This organic two a XX.X% growth had each of acquisitions this Our of offset sales increase in decline of X% X.X%. translation. segments. and of Safety from X.X% of currency XX% organic had was growth increase consisted our partially nearly of Workplace by Organic foreign ID quarter. organic

some and margin customer number teams for Our service our We're extremely of strong gross availability. share for out some our provided on serving customers competitors trending. to to manner, customers' the us of take a meeting focused where our turn stocked thus high-quality demand profit been are products and products have are X giving timely opportunity our product through well. in Slide Please

by labor distribution rising Our quarter. our is a in of We're significant within costs. and factories automation this absolutely period which centers, scarcity driving marked margin was critical XX.X% and

the these critical categories us In especially QX increases inflationary negative in more inventories, on we're general, we've many shipping gross QX. challenged, impact continues having expensive our everything to shortages through across is margins seeing a to wages pressures from freight, along margins. different to air between. the been critical helped buildup utilities to cost our the components be Price from Asia. with overcoming from and gross of chain supply for of And which profit costs use However, improve

XX% we expense confident find trending. eventually levels growth to drive our any that That throughout see input from increase means sales prices to facilities continue customers we of that in return Slide historic pricing. X.X% result, our with quarter, profit expect said, you'll we'll to On We're SG&A realized to And and signs which value. need increasing the our don't costs. continue we gross a inflation as we're number significant providing range. offset approximately abating, efficiencies margins our to This to X,

you As we quarter see, year. you in of Plus, as XX.X% sales. charges GAAP quarter percent of this last exclude to compared sales then a have further, amortization down the of declined in non-routine year in make progress mentioned was last QX continue SG&A the to of the expense this SG&A can SG&A declining of XX.X% if would to and from XX.X% driving third of sales XX.X% even sales quarter. in slides,

see our SG&A clearly XX% reduced we our benefits of than XX.X% half to ago the can the You of focus just number over expense X trending this sales in as efficiency of of quarter. dozen a Slide R&D. years sales, from less investments is on

increased scanners. we materials, of earnings are invested term. to on across in mentioned. building critical growth trends. and out comprehensive businesses, basis. I as over level our this last pretax a These high-quality that approximately amortization This to to equates including R&D GAAP encompasses sustaining the at this charges from year expense our was which earnings rate X.X% non-routine trace end to the million quarter, our increase Pretax a increased in for WPS significant $XX.X in as maintaining investment of sales. acquisitions completed platform see scanners the Impacting R&D, a X quarter RFID long that the well number illustrates opportunities of investments increased income Slide barcode X.X% as printers, track industrial R&D our continue and We're committed we

XX.X% to exclude this illustrates would periods increased have all charges if then And by you these X.X% to increased you an EPS and number third quarter WPS after-tax diluted our non-GAAP pretax If X items presented, income then increased compared EPS by would XX.X% from $X.XX to EPS the and trends. non-routine the of our $XX.X quarter. our by in quarter amortization earnings stronger this exclude Slide EPS GAAP the of million. $X.XX of impacts have last expense, even year. after-tax $X.XX to

our of And quarter, number the EPS a a fiscal this EPS of you of look both you'll of cash of and all-time X ahead our first On XX% year, EPS non-GAAP year. GAAP generation. highs if last This Brady. $X.XX $X.XX months at summary were record running find our for full XX, is our Slide non-GAAP

increased Although we increase stream to steady to support still the sales ensure rate levels increased volumes our a and our has slowed. our inventory customers, of of to supply

a from this activities can in quarter, generation. operating cash bounce expect you year back finish the $XX.X our Cash see strong result, cash million flow a and As generation was we to with QX. in

April poised buybacks to number XX, impact we Even net had customer can a up that than our million. balance strong building you XX, cash Now in ensure our on of future stepping the if more $XX on you'll cash sheet. and Brady's turn generation position still to demand, see to meet Slide inventories up we're after share were historically that has

Our including R&D, additional in and funds additional a strong acquisitions execute our value-enhancing in fantastic to returning to investing us sheet position puts balance completing activities, shareholders.

CapEx. Our new cash fund the to This to expenditures in generating sales economic capability-enhancing investing development, allocation fully first and product opportunities and our automation-focused use sales efficiency resources, cycle. is organic and throughout approach capital foremost, capital includes the

then fully and focused form years. We will our sense investments now our price. absolutely XX Recently, a of our of what in and we our in dividend and we second, investments organic dividends, ROI value when it for disconnect view between strong see And keep price. either value is and buybacks funding or dividends. manner acquisitions on the shareholders these between we where intrinsic we increased where deploy for investments a the positive. believe in to we annual for cash returning makes We've After disconnect consecutive funding stock highly synergistic have opportunistic we've disciplined cash our manner opportunities a Brady a Brady's seen intrinsic trading where

$XX.X shareholders and we've QX, to XXX,XXX nearly million. another our Slide the million year, share our X.X capital repurchased we commitment for return quarter million shares in As between buybacks for summarizes the fiscal we to in, this repurchased XXXX. which updated illustrates XX, XX X first All months such, ending to year end, and And our subsequent number shares. to in shareholders. returned repurchases clearly our $XXX of July guidance

factoring results view and this were positive our of stronger on year. and had the results Our initially we QX than fiscal remainder anticipated, these stronger are momentum into

per As of the such, a increasing EPS are our non-GAAP of we to range to guidance previous range from $X.XX $X.XX to $X share. $X.XX

per to EPS Our updated implies we our quarter range record share fiscal guidance solid. remained from that non-GAAP implies EPS non-GAAP fiscal earnings to our $X.XX year fourth of has XX% full intake increase to when end, $X.XX to order XX% XXXX. previous This guidance expect diluted compared year to XXXX of Subsequent share. range per quarter

to the near remain As inflationary environment such, our also we continue, at to for term. sales this expect expect momentum we and positive least

what shared elements are last of guidance pretty with our quarter. line we other in much The

of euro thoughts further further Q&A. that, can first lockdowns the timely year expect currencies or versus amortization on such and range $X million. This offset income CapEx cover our XX% us rates to Russell April half purchases, This With the is to meet closing the this or full logistics of million already continued range and global to worsening expense $XX foreign a divisional $XX the to commitments expenditures, to is any incurred year. British we facility our the guidance increased before among in and million allow in approximately inflationary other range dollar excluding that million. turn don't now of U.S. purchases some the XX to guidance, inclusive of call economic others, as of exchange to $XX provide growth. pressures rate million customers, we to the manner. we Specifically, and million of results $XX guidance as pound, strengthening this $XX to are assumes from based to our tax back that of currency facility to from major Capital Russell? Potential future include a $XX to risks I'll expected million enough depreciation

Russell Shaller

you, Organic Identification most for Thank sales results outlines XX quarter million. pressures. strong, financial significant business. versus third IDS Like to sales XX.X% companies, up inflationary quarter experiencing in increased were our the we're year. division IDS of Aaron. Slide $XXX.X Solutions last XX.X% third our very again once the

of been percentage can. and as and we this down we've automation was as driving last and However, profit XX.X% increasing offset feasible year. of as a which sales where Segment was XX.X% efficiencies prices inflation much from to

exclude compared you three increase percentage from segment acquisitions last quarter a amortization have XX.X% sales in in been sizable third profit this the last expense XX.X% would then to year's as our If of year, quarter.

investments are generating expect to above us continue product new GDP of propel launches Our previous sales R&D that a growth. to stream we steady

inflationary that point facilities, complete our solution growth end sales their than is to which faster-growing challenges, in to necessary increased strong come. periodic Overall, My building fact, markets, that R&D solve organic through and these energy this making year. third as in in growth the are XX% acquisitions, sky in propelling strong trace investments future out challenges global by in last critical our Overall, and we're in progressing a with increasing Europe, pay also China were making costs. and shortage set. integrate the high move IDS were we're our will the positive. to in up in with into despite teams done relevance In solution in and digits the includes that EMEA quarter of Asia job And growth trends which great track investments factory almost to the the our R&D, Organic certainly include customers environment. necessary to have quarter. over industrial growth including our the in acquisitions lockdowns sales and and forward sales We're our to of sales macro sets XX% automation unique was mid-single organic will recent sales when compared engineering planned, more sales this we've facing which Americas accelerate despite navigating our years chip region quarter providing Brady's incremental Brady force organic the are investments keep for talent our growth Regionally, sales dividends.

Our compressed, winning and strong product intentionally results margins in have of every which for last gross service been slightly have this availability long-term dollar bodes strategy it as our pushing taking we well is right the for but us over prioritized believe margin. that We future. customer share,

sales Our to growth our come. with continue product year fiscal years and the automation strong generate for in strong efficiencies lineup, positive of margins rest the confidence sales over drive us investments that healthy new organic and and and we'll momentum give to to

to Safety performance. you'll Slide financial Workplace Moving of find summary XX, a

with million business, organic streamline $X.X Our if $XX.X the also nonrecurring in exclude XX.X% WPS finished QX in of $X.X growing were of costs the increased from of quarter. sales increased nicely, million current year and profit And WPS quarter. Profitability growth that the segment business million to to the $X.X X.X%. million incurred of last in you

have performing WPS some been well are of performing time. quite pieces and for Some well business our

of this profitability safety back the Europe instance, products and business COVID-related as quarter core sales For fewer into products. more workplace in nicely improved shifted

has On our quite WPS well. as Americas hand, performed in the historically other business not

our increase quarter. profit reducing and simple These WPS our includes online initiatives, brands, is and more units. optimizing business brands strong that SG&A in improvement solutions resell businesses businesses costs. solid our is and foundation WPS, buy accelerating solutions customer our count that are These customers masked WPS competitiveness, which custom strong distribution team strong Americas our their underperforming catalog to this strong by items. headcount key with SKU internally significantly the have their of some our business and of However, The reducing actions in business performing are a number our several value well. quite resulted provides a prices produced simplifying and been including to expense, In

We are actively working to improve.

Looking at have improvements and ahead ahead, drive job SKUs product and but portfolio, look critically we of or that from product quarter, if a profitable WPS we'll this our work continue even offerings. unprofitable The means nice still team away us. we'll marginally more walking profit did to

our questions. recap QX quickly before turning over to it more performance me Let one time

all-time non-GAAP an record. our First, record $X.XX of GAAP our share a XX% high per $X.XX, was earnings and also at above earnings was record nearly previous per share high our

by more than revenues grew XX% we this Second, quarter.

improvement took meaningful in fourth, to resulted And it more much aggressive Third, actions profitability. back improve our business, we shares. in a WPS we were and in buying

ago. share In fact, our two we fully exhausted authorization repurchase days

just for repurchase approved us on of well quarter. based approximately another share Brady price, shares, authorization of shares shares. total worth Board X.X% equates performed our $XXX current million very Our to under this X.X which million in to outstanding

pace new accelerated more like change increased of chains shortages a We've stress macro with have supply increased inflation. been dealing or several increased costs, we has the Warren labor input over event so. every month and China, overall Europe, However, it years. macro lockdowns And last major in the seems

anything, some in history in can't has is taught will that predict near we likely recent next the be us sort will be, event While unforeseen event there the but term. of

set we execution better has is hurt to meet has and to consistent day. us, at time to a able ourselves ever. I We've that today ball than are we that hazy air would but that make on this ensure thrive freight our but gross critical parts of increased throws We heavily strong our positioning customers our margins, customer regardless important and what specifically. more every world is the of the will opportunity long-term service, macro service trade-off that in our challenging stated, a superior relationships. which positive convert relationship. a result strong financial our sheet solution growth and in customer earnings profitable have position. goal we this strong our a long-term years and printers Simply Fiscal to to demonstrate is and that advantage customer to come. to was take competitors execute a customer focus of serving for crystal customers. materials, Brady We're can our in per record we're to share inventory long on needs focus is of increased than balance term we resulted driving to the year. have and daily believe build the Brady This Every us levels to XXXX affords enviable and competition. customer Our on are opportunity an environment Plus, execution focused

in And more far well continuing team fiscal so The so customers far, fiscal our fiscal in future. And job is our up while 'XX, are excellent done XX% serving an levels. above invest to our XXXX running EPS revenues than Brady has by this year.

start last positive over you a per we per that record value. XX% transitioning deliver to growing with pressures, earnings have still earnings to July have forecasting and Q&A. And I'd We're GAAP of listeners? faster XX, increasing we to Yes, have shareholder Operator, solid to earnings year-end XX% will company. grow like -- inflationary foundation but into will level, from momentum XXXX. provide share We we we share would and are year's significant forecasting for our please but the share we're instructions the that, levels per

Operator

with of from [Operator George Instructions] Bank America. Our question is Staphos first

open. is line Your

Cashen Keeler

Cashen And actually on new on George Staphos. for congratulations to your is Russell role. This Keeler

some to explore want Just you going that opening may acquisitions. back additional to you your remarks, mentioned

And just some now, for about right still might your just or So markets what is this you consider? appetite you opportunities integrating what given acquisitions? talk past can you're

Russell Shaller

Yes.

we've comment is fair to I that. far obviously, anything probably So going specific industrial will you business, I would on on not that acquisition closely we're think the all targets. that space look I say, that's And game. guess is But or to so at related if things I done comment our that

Cashen Keeler

about, and bit expect that you I mix it you benefit talk moving structure detail a terms can more margin guess, Workplace sounds had can in in like the of some particularly you which expectations? streamlining then, may But little just have to And might what forward, underperforming benefits. businesses just were Safety, just you there, from cost your be? then the that, And

Russell Shaller

sure. Yes,

has earlier So in a the as I online particular, The move to number mentioned certainly significant in for been has them as business, faced headwind the of a distribution Americas challenges. a call, business.

we optimizing started institute We're our our addressing to it's first quarter portfolio or at year, the I this that. predict months quarter the how changes, first uplift that in we third quarter think me, -- how we're assume this But footprint As going the serve year expanding that. look coming and indicative to in I'm and digital years, that to that we would not we're what exact looking from customers. but where see excuse seeing the -- the of the you're plan we to those is future. of we

Cashen Keeler

for year? pricing particular Just in one final any the of volume one about assumptions guidance remainder for embedded me. the Can talk your you just or

Russell Shaller

Yes.

growth. barring other about pretty we're some in events, quarter, track be to third foresee seem for right to on some quarter new So what the read And the month. now, we were clocking in fourth doing heavy every significant I which we essentially

of say more the quarter just the quarter. would fourth I in So third

Operator

Our Sidoti. Ferazani question from with is next Steve

Your is open. line

Steve Ferazani

that key freight a and know last I on in Aaron, increase Russell, want out in couple that shipping margin And rapid seeing numbers get clearly but with quarter, how certainly, solutions. costs, of Because clearly of know better obviously on big Looks margins price. you're think like your about that? I concern improved. was Is that we any entering the coming should that ID the pressure didn't where quarter. were this catching the to you up quarter, we

Russell Shaller

definitely. Yes,

through that companies distribution. industrial most to similar think sell I

which prices. is the we as contracts at and some We off which place, our have roll speed We've the contracts in them terms amending increase been in dictate terms doing of contracts. our can or

there a clearly effect. year, So first say was bit would the this quarters I of catch-up a of in few

not but to freight, cargo QX. you with burden more in our physicians it we're costs. think in eventually, freight the significant we our said, can and lot been cargo I of to and the see less normal more that input back And we've certainly a air in while us progress that pricing Also a selling made our finished, improvement container towards in reconciling see relaxing prices. more freight past year, has costs, realistic

So the improvement are continue to will us I quarters. number that think, there coming a give over things, of

Steve Ferazani

margin then was the quarter to number what to a it for internally this quarter. model us But think year mix is sure QX ago. Safety question much number analysts, challenging, and versus it's much, that And that. hardest And looks how is one-off stronger and like every the that some about I'm to Workplace of degree, the and sustainability obviously

make you I and that, I'm how to that. number of wasn't to know you've guessing that surely in but just margin seen quarter some and this and Now think some changes about that we're came going

Russell Shaller

Yes.

and over to several President lot bring a focused been same those last previously to operations the we of where all for our quarters. Brady gains opportunities with some our improve the over to elevated next growth. the EPS of who few cost I to IDS, X on improve we're being of for course, I've efficiency our company, consolidate do Officer years head and of I've years, position. of our Operating Chief my for see through areas manufacturing, to operations, can So and look I'd portfolio of and going positioning we was improve margins things some our

Steve Ferazani

is reasonable few it? the in that's terms is Or not that sustainable, expect it? to quarters number In number, a of next XX%

Russell Shaller

When you mean quarter -- XX% you OI XX%? this which or the of mean XX%,

Steve Ferazani

Yes. Yes, exactly. Exactly.

Russell Shaller

the certainly can if be would that territory in not we in hope better. I future, that

Steve Ferazani

Did growth just solutions? you And number then -- ID quarter the in in me me ask let healthcare for last the one of well, this. terms for was give

Russell Shaller

not. did We

Aaron Pearce

I number. X% certainly grew over Yes, health year-end can. over just -- We can't. by this certainly just care I grew quarter, it

Steve Ferazani

really to not that's So contributor strength the there. big the

So that's Because in to been you would a would product think development more improvement. thought other care would have have health contributor bigger markets? I the

Aaron Pearce

to amount percentage spend No. bring which considerable market. portfolio to -- the on to The R&D of hands is biggest takes the in down, a of years sales a IDS. We as contributor some

great growth overall you're business of And business. growth -- several and we've which profit as part new base both as -- the launched have the what that. this in to in well the IDS We products contributing also a our in was of seeing the got the year, that's

Operator

Next comes McGinn Fargo. with from Wells Mike question

Mike McGinn

product XX-XX. products, your of portfolio? maybe curation what what these and you substitution some Or like without You some if of in XX-XX there's to within exists -- terms you saying sense that as of core that I inning within process? are a wanted mentioned get portfolio like growth of think you bit Safety. sounds wanes level Workplace some cut little just It SKUs,

Russell Shaller

give I it. you XXX% then not can I'm if up the didn't few answers, I'll question, hit a I you but and follow So understood

room So move. think we? what inning are out I to some got We've would probably third inning the we're XX. clearly of in

of absolutely that the said, terms profitable. a In even SKUs, really thousands helpful business. said, hundreds with not of with that of of or SKUs. it's But long-tail that marginally tail with But some is

what through really that is makes And WPS portfolio significant frankly, emphasize, very things the is very you I part. a a it strong task and a SKUs actually, It compelling. profitable, with decide do and profitable on look thousands less the of so to there isn't significant growing. other of part of WPS, Because a is by part going of is to in aligned that it of exciting and is when want lot WPS, hundreds go have clouded the

through more I so to we still over innings next look analogy, work several the this use a have do. your as to lot And

Mike McGinn

Just I And just you R&D? my and press some kind that and release and walk strategic internal regarding with, initiatives me Can IDS believe, Honeywell. on topic. relationships through I to you overlap regarding your of moving -- had questions all hit technology interesting an that

Russell Shaller

negotiated up excited imaging the have intellectual super their technology with That license us great But industrial shutter. respects technology. in license pretty a on I'm track a builds very that practice listeners, do to Brady high-speed years. in, and probably a is trace coming to property built a and global They to rights. licenses emerging the looking Honeywell. much we relatively our an on see most a gives technology free we're to XD imaging rein core already as of having Yes. what and portfolio based arcane codes over still that

path, got from needs a suite that away do months But are perspective. full of to least There's what XXXX, IP longer engineering we need We do through or between to a essentially clear XX lot a now we've products. at of to from happen and then. an

Operator

with Our from Housum Keith next comes question North Coast Research.

Your line is open.

Keith Housum

me strategies about? in you, more your be predecessor the Russell, of should terms the priorities any guess term your on that level Russell, Let here, with we congratulate a I thinking at in appointment or near I to CEO. differences starting guess higher

Russell Shaller

growth cut did for both record Yes. optimizing say organization worked I the in far divestiture. into and a to the Teledyne more of a I and great of and cost am acquisitions number at aggressive of is of would I coming I more where Michael well were portfolio the years at very job number we ways say looking oriented and focused and being as a costs, occasional mergers about as My track terms portfolio. shaping would

looking kind was I'm as to that's and CEO. bring bear that my of to So training, what

Keith Housum

hear Good to it.

In two the increasing? innings that the sounds Do be terms you How in you to year thinking for out early of going have possible. if you'll be you a see been of as some long portfolio like in you're a level? next segment, profitability are the on growth growth or higher headwind as perhaps no more satisfied calling the that's it you of necessary has still WPS see WPS

Russell Shaller

generation. maximize cash it's say and your would I and both optimize you business, look Yes. to all current is portfolio future

is are to our at it future, I'm But segment corporations face we're doing. lot looking really headwinds. and will going additive all not next hope make will we I to won't of every about So which say to year's the for a or I organization see business, would revenue every whether whether guidance

Keith Housum

And your prices you provided IBS IN, there? PDC, on some But in raise in raise to perhaps you WPS segment color with the can touch the ability ability on distributors. what's prices on the to the

Russell Shaller

Yes.

it's So surprising. very too and -- not granular goes again, it

your go to go economics are, to with power you raise got you've commoditized pretty along back more prices, proprietary If positions, market the market. position or you on have -- you have a to the if the you have good more you

with of to starting the most and locks most the see that of competitors Now we up solutions pretty said, do increase much prices.

slow industry going be. were point pretty and to how pick comfortable feel decide up as the few board course, I to frankly, in share. to as across And last increases. and this I have think was couple then, price a whole And that is And that of a that transitory of in you well few through the competitors. that But over maybe quarters. our at our a rolling this the WPS prices take fact, opportunity performance the of PDC published see both some distributors the as in you the they've

Keith Housum

And last I'll and one me back. jump for

and the tough In issues, obviously, of chain quarters. the now getting the have the chain private still perhaps we for better it's this Any you Do to midst supply several terms that you? pockets supply at of in for are say? any Or you see light -- of issues tunnel? been there's end it

Russell Shaller

it time went every I -- a like thought out. I'd was Yes. there light,

our So chain planning we've into incorporated current supply issues purposes.

prefer reasons. organization get they're some solid a bit strategy. to we million, performance worse, and which to right would as issues we'll any from say a more where I use $XX added more, see particularly imagine of we're logistics, seeing us lot a normalized, fully buildup. the and that I protect to our of out long so if of to into don't cash get inventory clearly that we our can now, supply don't taken some chain little as relax And would We've baked And inventory maybe they our the has point for that shipping other I

it hoping freeing We through the lockdown I up seem gotten they and little okay, seem steady. have So Shanghai bit. to to be is would say, a right now, we're

leave So at right steady I for worse. better, to now, guess not it not I'm state going

Keith Housum

I'll just that one. question, Last maybe follow on up

of air margins, you for the of kind us? gross of can terms impact that contextualize freight In on your

Russell Shaller

Yes.

know are in mix down. just for been able, points air We've in headwind rates to shipping inventory. excess opposed to more the recently cargo freight able So us. We've We last increased lot convert as air because much shipping of increased our as basis as been container very will put to well weeks, just of a come airfreight. few freight. more the about It's XXX a to container started

which the or next anybody's abandoning is will something us in helping the So in air us we until chain really two. guess, imagine out, quarter I don't see that but supply freight coming that can't is is see entirely year. happen I sorted

Operator

the to closing showing currently remarks. I'd I'm for back at this other turn And like no Shaller over to time. questions Russell call

Russell Shaller

And company markets. for I a Great. as to growing thank value profile world, long-term to with while about for taking do company. changed the an than really fantastic GDP and company proposition. we XXX-year-old a I We've in we Thank end a that faster-growing see and We're uncertain calling faster an want great concluding with excited am you the all to and foothold our And have few live move in future in a increasing over all like of your thoughts. leave I'd you the time. I Brady. as Q&A. you CEO

quarter, grew XX.X%. This we at

actions this margins, we XX.X% efficiency are profit improved in quarter. from QX XX.X% improving and subsequently, pricing to Our gross our

in in us we keep our a strong well, and a the returning which perform in product round business working continues inorganic Safety We're industrial and improve extremely by profit faster-growing moving into aggressively us are and These shift long-term to investing more organic both our our investments to our Our profitability IDS as we've creating our division Workplace R&D And taken this finally, markets track to actions WPS quarter. out profile. customers investing funds are end increase have offering. shareholders. the are evidenced growth sheet, making Brady and to also and significant to trace enables balance paradigm a while in relevant to much

the sheet of generation from may And even economy I'm Our turbulence. of is Have make morning. and Operator, port your you time a Brady. Thank future call. disconnect balance you though the the for market cash optimistic great this day. the future strong future macro uncertain, safe about a Brady

Operator

for call. you today's Thank conference This participating. concludes

disconnect. may now You

Brady (BRC) 26 May 222022 Q3 Earnings call transcript